VN-Index emerges as world’s top-performing market in Q1

Hanoi (VNA) - The VN-Index, Vietnam’s benchmark stock index, grew 19.33 percent in the first three months of this year, becoming the best-performing market in the world, followed by Egypt with 15.52 percent growth and Brazil with 11.73 percent.

The index ended March 31 at 1,174.46, up a staggering 200 points from the beginning of the year, which was the biggest gain worldwide.

Vietnam’s stock market has been upbeat since the second half of last year but the upward momentum slowed down after March 23 when the index surpassed its March 2007 peak. Rising volatility on the global markets and fears of a trade war between the two biggest economies, namely the US and China, dampened investor confidence.

However, the local market still ended the first quarter strong, with optimistic medium and long-term forecasts put forward by securities companies, experts and investors.

The VN-Index, a capitalisation-weighted index of all the companies listed on the Ho Chi Minh Stock Exchange, closed at a 10-year high of 984.24 on the last working day of 2017, earning Vietnam the nickname Asia’s “frontier market” with a 47 percent gain for the year.

The gains of the VN-Index may extend, with the index forecast to reach 1,210 by the end of 2018, according to a survey of 10 strategists conducted by Bloomberg.

Besides the index’s growth, liquidity has also improved significantly, as its trading value soared more than 60 percent from 2006 to 5 trillion VND (220 million USD) daily in 2017, and the figure has rocketed to 9.6 trillion VND (422.9 million USD) in early 2018.

The breakthrough in Vietnam’s stock market is mainly attributed to rosy macro-economic fundamentals, positive business results among listed companies and high investor expectations for State divestment plans among many large State corporations.

According to the General Statistics Office, GDP growth recorded in the first quarter of the year was seen at 7.38 percent, the best first-quarter performance in the last 10 years, backed by strong growth in agriculture, industrial and construction sectors.

Lending interest rates also remained stable, supporting businesses as well as stimulating capital flow into the stock market.

Another major push was caused by the strong inflows of foreign capital. Foreign traders were responsible for net buying values of nearly 10 trillion VND (440.5 million USD) in the first quarter, after total net purchases of 28 trillion VND (1.23 billion USD) in Vietnam’s stock market in 2017.-VNA